In the event of a C12 Group franchisee's death or disability, what qualifies as a transfer?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
| u. Dispute resolution by arbitration or mediation | XII, Exhibit F | All matters can be appealed up through C12’s defined three-step dispute resolution process which culminates in Christian arbitration pursuant to which the parties engage three Bible-believing Christian arbitrators as follows: one selected by the franchisee, one selected by C12, and one selected by such two arbitrators. The remedy recommended by the arbitration panel will be binding and final with no further recourse by either party. Subject to state law. |
|---|---|---|
| v. Choice of forum | XII, Exhibit F | Litigation must be conducted in Texas unless otherwise stated in Exhibit F for certain State Disclosures (subject to applicable state law). |
| w. Choice of Law | XII | Texas law will govern (subject to applicable state law). |
| C12 Franchisees | ||
| Total Revenue | ||
| January 1, 2024 to December 31, 2024 | ||
| Total Revenue | $44,250,036 | Reported by 65 franchisees. |
| m. Conditions for franchisor approval of transfer | X | New franchisee qualifies, transfer fee of $6,000 paid, purchase agreement approved, training completed, all outstanding accounts receivable satisfied, release signed by you and current agreement signed by new franchisee (also see r. below). |
| n. Franchisor's right of | Not Applicable | C12 does not require right of first refusal, but must |
| first refusal to acquire | approve owner/operator and may, on occasion, take | |
| franchisee's business | ownership if necessary. | |
| o. Franchisor's option to purchase franchisee's business | X | If you ask C12 to purchase your business or you have not actively tended to the Territory for 60 days or more, C12 has the right to purchase or, in certain instances, regain the rights to the Territory at no cost. Subject to state law. |
| p. Death or disability of franchisee | X | Franchise must be assigned by estate to a C12- approved buyer within six months of your involuntary physical departure from the practice to qualify as a transfer. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 36–40)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, in the event of a franchisee's death or disability, the franchise must be assigned by the estate to a C12 Group-approved buyer within six months of the franchisee's involuntary physical departure from the practice to qualify as a transfer. This means that if a C12 Group franchisee dies or becomes disabled, their estate has a limited time frame to find a buyer that C12 Group approves of.
This condition ensures that the C12 Group franchise continues to operate under an approved owner, maintaining the brand's standards and service quality. The approval process likely involves assessing the buyer's qualifications, business plan, and completion of training, as indicated elsewhere in the document for general transfers.
For a prospective franchisee, this highlights the importance of succession planning. Franchisees should consider having a plan in place for who could take over the business in the event of death or disability, and whether that person would meet C12 Group's approval criteria. This also underscores the need for adequate insurance coverage to protect the business and family in unforeseen circumstances. The six-month window may be a relatively short period, so proactive planning is essential.
This requirement is fairly standard in franchising, as franchisors typically want to maintain control over who operates their branded businesses. However, the specific timeframe and approval process can vary, so it's important for prospective C12 Group franchisees to understand these details.